Tax Alert

IRS Delays Implementation of Key FATCA Provisions

(July 24, 2013)


On July 12, 2013, the IRS released Notice 2013-43, which delays for six months the implementation of withholding, reporting, and due diligence requirements under the final regulations of the Foreign Account Tax Compliance Act (FATCA). (Read a discussion of the FATCA provisions and an analysis of the final regulations, which were released in January 2013 and extended some of the original due dates.)

The effective date of the withholding obligations is delayed from Jan. 1, 2014, until July 1, 2014. The date for which new account opening procedures are required to be in place also has been extended until June 30, 2014.

  • The date for determining a pre-existing obligation and a grandfathered obligation is now June 30, 2014.
  • The date for completing due diligence on pre-existing obligations is deferred six months until Dec. 31, 2014.
  • The expiration date of Chapter 3 documentation (Form W-8BEN, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding”) is delayed until June 30, 2014, unless there is otherwise a change in the taxpayer’s circumstances.
  • The registration portal is expected to be available Aug. 19, 2013. The IRS expects to begin issuing global intermediary identification numbers in 2014 and will post the first foreign financial institution (FFI) list by June 2, 2014.
  • The U.S. Department of the Treasury intends to consider jurisdictions that have signed intergovernmental agreements (IGAs) but have not implemented agreements as having an effective IGA covering their FFIs. Treasury will publish a list of these jurisdictions.
  • Treasury has indicated that it expects to amend the regulations to modify the requirement to report U.S. accounts by participating FFIs to only include accounts identified in 2014. Previously, accounts in 2013 and 2014 were to be reported. Currently the due date of the first report is March 15, 2015.

 

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John M. Kelleher
630.586.5274
john.kelleher@crowehorwath.com

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